Singapore Factory Output Jumps 13% as AI Electronics Demand Surges

Singapore's manufacturing output rose 13% year-on-year in May, powered by a surge in AI-driven electronics demand that offset sharp declines in the chemicals and biomedical sectors. The electronics cluster alone expanded 35.8%, led by a 59.2% jump in infocomms and consumer electronics and 37% growth in semiconductors — both directly tied to sustained artificial intelligence demand.

Precision engineering followed closely with 32.2% growth, fuelled by higher production of semiconductor equipment, optical instruments, and electronic connectors used in AI data centre infrastructure. The data, released by the Economic Development Board, confirms that Singapore's advanced manufacturing base is riding the global AI capex wave as hyperscalers and chipmakers continue expanding their presence here.

Not all sectors shared the uplift. Transport engineering slipped 5%, chemicals dropped 11.5% on feedstock supply disruptions, and biomedical manufacturing fell 24.2% as pharmaceutical output softened. The divergence highlights a two-speed manufacturing economy, where AI-linked clusters boom while traditional segments tread water.

Why it matters for Singapore: The electronics and precision engineering clusters now account for an outsized share of Singapore's industrial growth, reinforcing the city-state's position as a critical node in the global AI supply chain. With semiconductor equipment makers like Applied Materials and ASM investing hundreds of millions into new facilities here, this AI-driven manufacturing momentum looks set to continue — provided global demand for AI chips holds steady.